Episode Transcript
[00:00:00] Speaker A: Having been the actual in house chief compliance officer to five fintechs, my job was to build the compliance program. Some of the companies who come to me, they might say we had someone we don't know, when are we compliant? What we do is take it, assess it and say, okay, this month we're going after this set of controls, we're going to make sure the rest, we're not going to break the law. You should be getting from your compliance professionals like a roadmap that says here's everything we need to do and here's the plan to get it done.
[00:00:28] Speaker B: Welcome to the Entrepreneurs Podcast. I'm your host Zach Renard. You can find me on Social Zack B. In each episode I bring on experts from various industries for you to learn about these strategies and insights driving extreme business growth. The Entrepreneurs Logbook podcast is sponsored by we feature PR where we're dedicated to helping entrepreneurs build their thought leadership and businesses by booking them on podcasts and launching their own podcasts. Today we're joined by Jamie Uppenberg, co founder of Renamway Consulting, a specialized consulting firm that helps fintech startups navigate the complex regulatory landscape and build scalable global compliance programs. Jamie is a financial services executive with deep payment experience and fintech leadership expertise who successfully guided companies through critical compliance challenges. As a former chief compliance officer at companies like Extra Card and Guided, she's built comprehensive compliance environment from the ground up, manage multi state licensing requirement and help various startups secure crucial brand banking partnership and running group. She continues to help fintech founders transform the organization to a risk based compliance control environment while maintaining the agility needed to compete and grow in the space. Jamie, it's great to have you on the show. Welcome aboard.
[00:01:42] Speaker A: Thanks. Yeah, good to be here.
[00:01:44] Speaker B: Cool. So every show that like podcasts that we record, what I always like to ask, like any guest that comes on the show is if you had to like restart a company, build a company from scratch, knowing everything that you know today, what's the one thing that you would change or implement from day one that a lot of entrepreneurs go wrong about?
[00:02:04] Speaker A: What I primarily see through the fintechs, I mean fintech startups is primarily what I see other than Runway itself being a startup now, which I guess I could speak on as well.
In general when I come in, they've done one of two things. They have either put all their money and time and effort into making a product perfect and have really neglected the marketing side of the business. They really thought if they built it they will come and then the Other side of that is that they really put all of their time, effort and energy and money into the marketing side and business development of the business and neglect the product and it, it they really don't have a product to back up what they've sold. So I, what I see most often is that it is a staunch balance of attempting to build a product to an MVP level that you can begin to test and not overbuild into something that you think is perfection. And ultimately you may find out that the market doesn't need or want half of what you have.
It is that MVP build and then getting that marketing side moving with it.
I would say on the Runway side now that I am in like I am the co founder, not just the CCO of the fintech of the startup, we are in the same boat. I see. The same thing is that we are balancing our growth and our products. Like what do we offer, what do we do with the same side of like okay, how much time and effort do we put into business development? You know, how much should I be in business development out here doing you know, activities like these versus helping our clients and making sure that my product is, is what I want it to be and what I envision it to be.
That is always the balance to be struck.
[00:03:57] Speaker B: Yeah, because that's interesting and I love like what you mentioned, the beginning because I feel like so many like newer founders companies, they get stuck like when they're launching like their first company, they get stuck in trying to make the perfect website, the perfect logo and everything like that. When they don't even have a customer in the first place, they have not even found market fit in the first place. They're trying to do all these little things that have absolutely like no ROI and they're not actually like moving the needle.
[00:04:20] Speaker A: So.
[00:04:20] Speaker B: So I feel like when you're beginning starting a company that's like a phase that a lot of like entrepreneurs get stuck in. But once you get into like a phase like your company, like what you guys are doing, it's more about finding that balance. As you were mentioning just seeing like okay, we should focus on the needle moving efforts but we can't just disregard client fulfillment because obviously that's what keeps the lights on and keeps your clients happy here. So a big balance and like a very big balance.
[00:04:47] Speaker A: The other piece I'll mention is I've seen a lot lately and I think it's because fintech did the investment dollars, they didn't dry up, but they definitely became less two or three years ago, like there was a lot of movement and it was hard to find funding and so a lot of fintechs have folded in the past two to three years there. If, if there's any advice for after you're started, I mean your question was from scratch. But you have to keep your expenses in line even when you expect growth. We're seeing a lot of getting investment dollars and having those advisors advise you to just spend, spend, spend, you know, grow a team of 175 when you were 20 people.
And unfortunately the growth in the product and the revenue side doesn't accompany it. So don't get pushed into growth. You don't have you if you need 50 employees like because you have revenue to match it, you'll be able to get them. Don't go out and run and get them if you don't need them yet.
So I see a lot of this run to growth that isn't there.
So and it's same, same thing on the Runway side. We have to make sure that we spend wisely and don't run to growth we don't have yet.
[00:05:58] Speaker B: Yeah, I mean I think that's what every company needs to do find like that balance again on they don't exactly, but they have to find it. And one thing I'd love to touch on because I know we're talking about like Runway here but I'd love to like understand more about the work that you guys do with like fintech startups and when a founder like company owner or something like that comes to you with a new like idea like what is the like actual process. So like really help them understand and navigate like the regulatory landscape that they're entering. Because you guys obviously work with companies that are in like really highly regulated like industries as well.
[00:06:32] Speaker A: Yep, yep we do. And I would say the big difference for Runway Consulting is that we come, the co founders come from Fintech, so a lot of other consultant companies, you'll see them be ex lawyers or ex regulators and they've never actually been inside a fintech, they don't know how they function and that has quite frankly really large limitations for how to make recommendations to the company.
So having been the actual in house chief compliance officer to five fintechs, my job was to build the compliance program and then once it's functioning and running and doing well handing the keys over and saying okay now here's the keys to your cmp, your compliant management program.
I built a methodology for doing exactly that in a repeated manner as a fractional cco.
So I and my team, when a company comes to us and they're saying, you know, we have this product, it doesn't work like all the others in the industry, or maybe it does, you've seen this before.
Whichever the answer is, but we need to get compliant and we don't really have anybody on staff who, who has been at a bank or my lawyer has been my cco. But they can't handle the workload, which is in general the case. And by the way, a lot of lawyers have never operationally run a compliance office. So we don't recommend it because it's not their skill set. Like they've literally never done it.
So basically we have a tried and true method for assessing the total company control areas and prioritizing them.
So the big piece that most fintechs miss and they'll hire someone who comes in and they, they say they can act as their head of compliance or whatever it may be. And all they see is non compliant activity everywhere. So it's like all they hear is the company, all they hear about how they're non compliant all over they may be. But what we do is take it, assess it and say, okay, this month we're going after this set of controls and we're not gonna, we're gonna make sure the rest, we're not gonna break the law. Like we're gonna make sure everything is in a decent shape, enough shape that we're not like damaging customers or breaking the law. If we can get control to there, then this month we handle this, next month we do that.
And it's a very methodical and efficient manner and it tends to be easily understood by the personnel, which is what you want. So regulators are, and banks, the banks who are often in between the regulator and fintechs, they want not just documents that say this company does the right thing, they want them to actually do the right thing. And this is where the industry is turning, is that we don't just take policies and say, yep, they checked all the boxes, they're coming and asking.
Both the regulators and the banks are coming and saying, I need more, I need you to prove to me you did this thing in your document.
And that's what we do. We make sure that you're actually doing the activities so that the documents are less scary and have less meaning. Because we know we're doing all of the right things and we do it in a way that teams can absorb at a pace that they can actually be compliant and not sink the company.
Because for a fintech, if we are completely compliant. Tomorrow we probably have no revenue.
[00:09:59] Speaker B: So.
[00:10:01] Speaker A: We need to pace it so we can make revenue and be compliant, like in parallel.
[00:10:07] Speaker B: But, but I like the approach that you mentioned because you're not, in a way, you're not trying to like overwhelm the clients and like, hey, these are all the, every single area that you're not compliant with. You're like somewhat giving your Runway, like somewhat like showing them exactly like, hey, these are the steps you're going to take to make sure that you're in compliance and everything is in line and we're good to like move forward. And I feel like a lot of people you work like companies that you might work with, they might not show you that timeline, set expectations and then you're like somewhat just like overwhelmed with like everything like all at once. And I think that's an important thing.
[00:10:38] Speaker A: It's very common. Yeah. And it's a common experience. And some of the companies who come to me, they, they might say we had someone, but like, they're like, we don't know where's Waldo? Like we, like, when are we compliant? Like, yeah, we don't know what we're doing or when they just came to us every day and said, we need to do this, we need to do that. You should be getting from your compliance professionals like a roadmap that says like, here's everything we need to do and here's the plan to get it done. Because I can tell you startups, there's a lot of stuff non compliant.
[00:11:13] Speaker B: Oh yeah.
[00:11:13] Speaker A: We can't get it done in a month.
That's not going to be what's going to happen. But the good news is they're probably not running $150 million a month.
[00:11:22] Speaker B: Not yet.
[00:11:23] Speaker A: Yeah, not yet. So we have a little bit of time.
[00:11:26] Speaker B: Okay. And I guess because I know we were talking about like the compliance program that you obviously have a lot of experience like setting those up. And what I guess I'd be curious to hear is when you work with a company like how does that process look like from taking a compliance program from like zero, having literally like nothing, probably non compliance all over the place to having something that's like really like fully operational. And I imag seeing that you're working like the fintech space, there's always going to be like new changes, new updates that you have to make sure that you're fitting those like guidelines. So I imagine you probably have to have some sort of complex system. They can always like tweak and adjust to have a good compliance program.
[00:12:04] Speaker A: You might think it's a complex system. For those of us who work CMPs every day, it's pretty straightforward. Like it's very standard.
It is simpler than a bank's cmp, but it has the same control areas. So most fintechs are managed by their bank. And so we have to align to the same control areas as the bank because when the regulators come to the banks, they're going to ask for the same control areas that they control the bank with. So the fintech, it's a trickle down right through the bank. If you're not going through your bank and you're actually directly licensed, usually through state licensing, whether it's loan broker loan direct loan licensing, loan broker licensing or money transmitter licensing, then it's the same thing. It's going to be the same categories the states regulate as they regulate banks. So we know the control categories.
What we want to do when we start with a new company, if we're doing the full C and P and not just one control area, we're going to assess the product itself. We're going to get the legal opinions about the laws and regulations that that product falls and are most pertinent to it, like what are the riskiest areas?
And then based on that risk assessment along with what the company's doing, if they have high risk marketing or low risk marketing, are they taking on a lot of high risk vendors? Low risk vendors. So we do this whole mini risk assessment for where's their product in the legal and regulatory environment and where do they run within the environment as far as risk goes? And then we prioritize the controls.
So the overwhelming majority will begin with financial crimes.
In general, we are helping companies that move money like a bank. And if you move money like a bank, you need to be compliant. In aml, money laundering, countering the financing of terrorism, that's going to be number one most of the time. So that's usually where we begin.
And then after that it could go into different areas. So we may choose to prioritize data next because maybe a SOC 2 type 2 is required and we only have a certain number of months to get there. We do a lot of SOC2 type 2 work in helping companies complete those.
We're not a security company, we actually just help them get the work done and explain it, explain what the controls are saying to them.
And then it might be SoC2, might be data work, it might be marketing. Some companies do really high risk marketing. So we need to get the marketing under control. We will get to all controls in general within eight months, eight to 12 months.
So we'll complete a whole CMP.
Parts of it will be completed throughout. Like, we're going to hit everything in four months. Like, everything will get a drip, but we're going to kind of tie the bow all the way through in about 8 to 12. It's just which ones we do first are based on the risk of the company. These are pretty big differentiations for how others build their programs.
They often have a great deal of focus on the documentation.
We certainly do documentation, and there is focus on documentation, but our focus is more on can you do what this document says?
So we're. Yeah. So we're not like, scouring laws and trying to find obscure controls. We're actually saying there's a base level for most companies. You have a product that gives you two more controls, and then we go and say, can you do these?
Because the most important thing is can you do what the document says?
That's. That is really how Runway differentiates, is that we have a.
A very high level of focus on compliance operations.
It's not that we disregard documents at all. We just don't.
We don't. I guess we would say we don't spend your dime there.
[00:16:07] Speaker B: Like we said, you take a more efficient approach.
[00:16:10] Speaker A: Yeah. Can you do it? Because I'll be honest, if someone finds something missing from your document but you're doing the activity, you're pretty safe. You had a couple of lines, you know, no big deal.
Yeah. If they find something in your document that you said you do, but you can't and you have done it ever, that's when trouble starts. So we look at it from the first perspective. Let's make sure we do it right.
[00:16:38] Speaker B: Okay. And I guess just for, like, any, like, company founders that they're looking to, like, implement like, a compliance program, maybe they. They have like. And I was like, counsel, lawyer that thinks they can do it. Is there anything specific that they should be looking for when implementing it? Is there any specific mistakes that you see? A lot of companies do when they go about trying to, like, do it themselves that, like, you really see, like, often or.
[00:17:02] Speaker A: Yes.
The biggest one is that they hire folks who say they can do this. And oftentimes they'll have a pretty decent title. They will have come from a bank, maybe even from a previous fintech.
The question that you want to ask is, do they have experience building a compliance program with a Google suite and a dream?
Like, you do not get more staff. You do not get to go buy $150,000. You know, software program can. Do you have experience. How would you do this? If all you have is Google and the need.
That is when people really.
You have to. It's rubber to the road, like, what. What will you do first?
Then after that, do they have any experience in building from nothing? And the second piece then is how will they communicate to you the priorities and progress of the program?
So I find this one even in companies where I'm there, I have a report, like, I have the information, and they, like, don't want to look at it. You have to look at it. It's a very simple report. You need to learn just like this much.
But you should be getting an objective report, not this anecdotal, verbal. Here's where we are. It's like, no, here's objectively what we have done. This is a known process.
If they can't communicate that to you in a report showing all your company controls, they maybe don't know how to do this.
Obviously, we recommend finding someone who's a builder, like Runway is, who can get the foundation. It makes hiring your full time CCO or head of compliance much easier.
[00:18:51] Speaker B: Yeah, I can imagine.
[00:18:52] Speaker A: Because you'll be educated. You'll know the reports you're using. And so when you go to hire, you can actually hire a little lower level, save a little bit of money, and they'll move into a structure that's functioning for them, and then they can just grow and they don't have to go through the headache. It is a headache to build a program. It is hard.
[00:19:10] Speaker B: Yeah, I can imagine. I mean, it comes from, like, years of experience, but also, like, different, like, expertise all put into one. To be able to have that, like, under one roof in a way here.
Yeah, I love that. And I guess, like, one thing I'd be curious here, and I always like to ask every guest that comes on the show, because you guys are obviously in a, I would say, like, niche space in a way, but you guys, like, specialize in, like, helping those companies. They're like, very, like, regulated space when it comes to just like, differentiating yourself, marketing yourself, just like, putting yourself out there. I obviously know that you guys are builders. That's like a big differentiator that you guys have. But is there anything else that comes to mind that you. You were to say, like, hey, this is what we do. This how it's different.
[00:19:50] Speaker A: Yeah. Let me talk to you about the rest of Runway. So I've been talking to you primarily about the Compliance arm of Runway Consulting.
Runway is there's Runway Global, which houses Runway LLP and also Runway Consulting. They're not parent, it's not a parent model, but we're all together, let's just say.
So what that means is we have lawyers coming from Runway LLP who specialize in fintech. They have years of experience in just helping fintechs and they tend to do it at a better rate than the really big firms that have these fintech arms.
So you're getting like almost more in depth expertise at a better price because this is what we do. And we've built models for small to medium fintechs. We know where you are. We like to meet you where you are. Now here's the beauty of this. You don't have to do this, but several companies do. And it's really valuable.
We can talk to each other. So you've got your lawyers who are expert outside counsel who can talk to me, your consulting arm who's building your compliance system.
And so what often happens is if the consultants and the lawyers are separate.
Yeah, you are the fintech founder. You have to coordinate the advice coming in from these two. And they don't always align.
So you might have someone who's a document who's very document focused, you might have someone who's operations focused. And then you've got the lawyer who's like letter of the law.
How do you bring those together at Runway? We bring them together. We sit together, we have the arguments, we talk it through, we talk about the risks of the business as we talk through, like, should they do this or should they do that?
Which leads me to also, Runway Consulting has a strategy arm also led by Kay Brinkley is the head head of that, that arm. And she has been with PayPal and Stripe, like she's a heavy hitter in the. Has been a heavy hitter in the fintech space.
And it's the same type of thing you were talking about. When someone comes and they have an idea or they need to do a US market entry, that's when K can really come in and help and go through.
You know, you could position your product this way and be under these laws and regs in this way, or you could, you could go left and do it in this other way. Like there's a lot of options at the beginning.
[00:22:23] Speaker B: Yeah.
[00:22:23] Speaker A: So the strategy arm works with the legal arm as well. And that's when what we see is that you get the best advice because you have some of the best experts in the industry kind of arguing with each other about best positioning, you know, risk, risk positions and how to address honestly regulatory defenses.
[00:22:45] Speaker B: Yeah. So you have them like all in their like one roof, all able to communicate like really effectively and everyone has like different set of like expertise. Whereas if you work with someone that only has perhaps a compliance expertise, like strictly that and nothing operational or anything like that strategy, then you're sure you're getting value out of it, but you're not probably getting the best bang for your buck in a way. And that's where, yeah, it's, you want to find the best part.
[00:23:08] Speaker A: You have to synthesize it. Right. And in this way like we synthesize it together as, as the group.
We have a lot of conversations like this about like, oh, they're having, this company's having X challenge. Well, what if we do this for them? And then somebody's like, well you know, operationally that's going to mean this kind of impact in a year. And they're like, is that better than this other way?
I, it's one of the, it's. I actually wanted this model. I tried to get some other lawyers to do it with me. They, they're at a larger firm and they couldn't do it.
Peter Loose is the lawyer who wanted to do it and we hadn't even worked together, you know, as much as some other lawyers. But this is the model that, that fintech should be working in where you really have experts kind of, you know.
[00:23:55] Speaker B: Synergy, synergically working together.
[00:23:58] Speaker A: Yeah, I mean we're definitely synergetically working together but we're also just taking the, the best ideas and scouring them for you.
[00:24:09] Speaker B: But also seeing that you guys have like this bird's eye view work like multiple startups, you're able to grab, see like commonalities and be able to like apply it to like different companies you work with too. But I imagine it's probably.
[00:24:20] Speaker A: Yeah, I mean I get, I get a lot of that because I've, I now I've done quite a few and so sometimes I don't even need the legal review of some products because I'm like, yes, my fourth time with the product guys. Like I got it.
Yeah, we're good. I know these laws.
So yeah, you can get a lot from that.
But that should, any consulting firm should have some of that for you.
But I think operations wise we probably have more like I know more about what happens when you operationalize the activities and what's working and what's working efficiently for the companies.
[00:24:57] Speaker B: Perfect. Well, Jamie, thank you so much for coming on the show and for like anyone that wants to get in touch with you. I mean, I mean, I imagine probably LinkedIn websites or any places people should.
[00:25:06] Speaker A: Look out or I'm clearly on LinkedIn. Jamie Uppenberg, Runway Group.
That one's pretty easy. So, and I'm, we're, you know, it's Jamie Rnwy Group, so we're not hard to find.
[00:25:21] Speaker B: We'll put down the description show notes for anyone that wants to join here and listen to that. But yeah, to your listeners, if you've enjoyed this episode, don't forget to subscribe. Reach out, reach out to Jamie. You can also find more insights at wefuture. Com, where we're dedicated to helping entrepreneurs build their thought, leadership and business by booking them on podcast and launching their own podcasts. Until then, keep pushing and we will see you in the next one.
[00:25:43] Speaker A: Bye bye.
[00:25:43] Speaker B: Perfect.
